Striking a fine balance between sound cash-flow management and expenditure on progressive infrastructure investment, Drakenstein Municipality in the Western Cape has officially been rated by National Treasury as the most financially healthy Municipality in South Africa.
The Municipality – covering Paarl, Wellington, Mbekweni, Hermon, Saron, Gouda and Simondium – tops the list of South Africa’s 27 municipalities with the largest budgets. These municipalities include the country’s eight metros and 19 secondary cities.
Drakenstein Municipality is followed by the Steve Tshwete Municipality (Mpumalanga) in second place, and George Municipality (Western Cape) and Emalahleni Municipality (Mpumalanga) jointly in third place.
Last year Drakenstein shared the top spot with the City of uMhlathuze (Richards Bay).
In the Western Cape – once again the top-performing province – Drakenstein Municipality also continues to make its mark, achieving the first place among the province’s one metro and three secondary cities.
George Municipality claimed the second place, while the City of Cape Town and Stellenbosch Municipality share the
This is according to The State of Local Government Finances and Financial Management as at 30 June 2018 report, just released by Treasury. This report evaluates the state of municipal finances in South Africa, using eight key measures:
1. Cash as a percentage of operating expenditure;
2. Persistence of negative cash balances;
3. Overspending of original operating budgets;
4. Underspending of original capital budgets;
5. Debtors as a percentage of own revenue;
6. Year-on-year growth in debtors;
7. Creditors as a percentage of cash and investments; and
8. Reliance on national and provincial government transfers.
Treasury has rated South Africa’s metros and secondary cities, as well as 186 local municipalities and 44 district municipalities – in total 257 municipalities – on the eight abovementioned indicators.
“This is a remarkable achievement and we are honoured to officially be recognised by National Treasury in this manner.
We believe effective, responsible financial planning and budgeting; clean governance; high levels of execution; and a zero-tolerance approach to corruption are what gives Drakenstein Municipality the competitive edge when it comes to financial management,” says Alderman Conrad Poole, Executive Mayor of Drakenstein Municipality.